Edwards' Intuity Elite Cleared in Europe - Analyst Blog

Edwards Lifesciences EW has received CE Mark approval for its Intuity Elite valve system. The product, to be used in patients undergoing surgical aortic valve replacement (AVR) procedures, facilitates small incision surgery and supports the durability of the Carpentier-Edwards Perimount heart valve design.

With the European go-ahead, Edwards now plans to make the system commercially available in the region aided by the recent sanction in Germany for higher reimbursement. According to the company, this favorable reimbursement in Germany remains a part of diagnosis-related group (DRG) mapping that includes the new category of rapid-deployment aortic valve systems. Intuity Elite is yet to gain approval in the U.S.

The Intuity Elite approval in Europe had been on the cards for some time. This should boost surgical heart valve sales in the international market going forward. During the most recent quarter, Edwards' biggest segment – surgical heart valve therapy product group reported sales of $207.0 million, up 4.7% year over year (up 7.6% on an underlying basis). The quarter's performance reflects solid contributions from the U.S. and Europe. Also, strong sales of Intuity valve in Europe contributed to growth.

Surgical heart valve sales in the U.S. during the quarter under review improved 11% on the back of increased growth in overall procedures and the company's regain in share due to the post-trial return of a competitor's product by customers. Edwards expects strong underlying sales growth of 4% to 7% in 2014 in its surgical heart valve segment, driven by additional traction in Europe with the recent CE Mark approval of the Intuity Elite along with the launch of new minimally invasive cardiac surgery products.

Further, in 2014, Edwards plans to complete enrollment in the U.S. clinical trials of both the Intuity Elite and the GLX advanced tissue platform. Additionally, the company will discuss the Zeta next-generation surgical valve platform, designed to broaden tissue valve therapy options, especially in younger patients.

The stock currently carries a Zacks Rank #3 (Hold).

Other Stocks that Warrant a Look

While we prefer to remain on the sidelines regarding Edwards at present, other stocks that are outperforming in the broader medical sector are St. Jude Medical Inc. STJ, Meridian Bioscience, Inc. VIVO and SurModics, Inc. SRDX, all with a Zacks Rank #2 (Buy).